Carter v. Sandberg

[189 NJSuper Page 43] In Sommer v. Kridel, 74 N.J. 446, 449 (1977), the Supreme Court held that a landlord has an obligation to make a reasonable effort to mitigate damages where a tenant wrongfully vacates a residence. The present case questions whether that doctrine is applicable to a suit in this State for damages arising

out of a tenancy in another state where the law of that jurisdiction does not require any effort toward mitigation of damages.

Plaintiff, a resident of California, owns a single-family home in San Antonio, Texas. Acting through a Texas realtor, plaintiff entered into a one-year lease, beginning on July 30, 1981, with defendant Timothy J. Sandberg. The monthly rental was $475 and a security deposit of $300 was given. Defendants occupied the home until mid-October 1981, when they left to move to New Jersey because of a newly available job opportunity. Defendants advised plaintiff about two or three weeks before they left that they were moving out. At the same time defendants contacted the realtor, asking that a substitute tenant be found and offering to pay for any fees earned by the realtor in obtaining another tenant.

The realtor brought a prospective replacement tenant to the home while defendants were still in residence. The prospective tenant appeared anxious to succeed to defendants' occupancy and requested that defendants accommodate him by leaving a few days earlier than originally planned. Defendants agreed and subsequently did so. The prospective tenant was then put in communication with plaintiff by the realtor. For reasons not indicated during the trial, the prospective tenant did not in fact replace defendants in occupying the home. Although plaintiff instructed the agent to try to get a replacement tenant, one was not obtained until March 1, 1982.

Plaintiff seeks to recover damages consisting of unpaid rental for November and December 1981 and January and February 1982, totalling $1,900, late charges of $190 (10% of the rental), $20 for cleaning the home after defendants left and $237.50 for the realtor's commission in getting a new tenant. Defendants have counterclaimed for a return of the $300 security deposit.

As indicated in Sommer v. Kridel, supra at 457, a landlord must demonstrate "reasonable diligence in attempting to re-let the premises" as an affirmative element of a cause of

action for unpaid rental. While each case must be judged on its own facts, the Supreme Court stressed that "the trial court shall consider, among other factors, whether the landlord, either personally or through an agency, offered or showed the apartment to any prospective tenants, or advertised it in local newspapers." Id. at 458-459. Plaintiff testified only that he directed the realtor to attempt to obtain a substitute tenant. There is no evidence showing what efforts, if any, were taken by the realtor that the court might decide that they were reasonable under the circumstances. There is not even an explanation why the available and anxious prospective tenant was not substituted for defendants. In conclusion, plaintiff has not affirmatively demonstrated a reasonable effort to mitigate damages.

This court, however, has been presented with the applicable law of Texas and takes judicial notice of it. Evid.R. 9(2). Texas law does not require any effort to mitigate damages. There a landlord has no duty to try to re-let where a tenant abandons leased premises. Stubbs v. Stuart, 469 S.W. 2d 311 (Tex.Civ.App.1971). Is Texas law to apply in the courts of this State in this situation or would public policy preclude such an event?

Absent public policy considerations, it is clear that Texas law must apply. Basic contract law dictates that "[t]he measure of damages for a breach of contract is determined by the law of the place of performance." Kentucky Dept. of Mental Health v. Mullins, 56 N.J. Super. 449, 463 (App.Div.1959), aff'd 31 N.J. 598 (1960). It is not only the site of the residence which determines the applicable law, but it is the place where the lease was negotiated and performed.

Further examination of the specific rights embodied in a lease only strengthen a decision favoring the applicability of Texas law. Generally, leases create two kinds of rights: rights in property (in rem) and rights in a person (in personam). The former are concerned with an interest in real estate ...

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